I have found there are two basic approaches to building the team you’ll need to replace yourself: you can hire managers in the functional areas like finance, operations, sales and marketing or, you can find a second-in-command (2iC).

In most cases, I have found that acquirers like to see a strong management team, rather than just one good 2iC. However, a group of three or four senior people can be very expensive and may drag down your earnings which could lead you to opt for the more pragmatic 2iC strategy instead.

I’m reminded of Leo McGarry playing the role of Chief of Staff in Jed Bartlet’s Presidency in the TV series The West Wing. The 2iC’s job is to protect the Commander In Chief’s time for the strategic issues.

The danger of a 2iC, in my experience, is that it concentrates a lot of power in one person’s hands. That can work if you finish each other’s sentences, but if you ever fall out of love with your 2iC, it can leave you feeling neutered.

If you are going to use a number two to pull yourself out of the day-to-day details, my suggestion is to align your 2iC’s compensation with your goal to build a sellable business. That way, you avoid a conflict whereby your 2iC is looking to meet their short term objectives (either profit and/or revenue) and you’re looking to make investments that will make your business more valuable in the long run.

If you’re curious about how to find your 2iC, take a look at the first of the three articles below on selling a business where I interview Bob Sutton. Bob is a Stanford Professor and the bestselling author of Good Boss, Bad Boss and The No Asshole Rule and he provides his five tips for hiring a 2iC.

I’d like to hear from you. Are you in favor of a full blown management team over a 2iC? Any experience on how an acquirer views a 2iC-only replacement strategy? Please share your thoughts in the comments section of this post.

How to pick a second-in-command

~ published January 25, 2011 The Globe and Mail

Last week, as Steve Jobs set off on his most recent medical leave of absence, he handed the reins back to his second-in-command, Tim Cook.

Mark Zuckerberg has Sheryl Sandberg on staff to provide some adult supervision at Facebook.

A second-in-command (2iC) can balance the demands of running your business, and someone who has been clearly anointed can also go a long way toward making a leader redundant, which should be the objective of anyone wanting to build a sellable company.  »more

Are You Creating a Job or Building a Business?

~ published January 20, 2011 BNET

At some point, I think you have to decide if you are going to be self-employed or run a business.

Of course, most people start out in business being self-employed but soon reach a crossroads where they have to decide if they want to run a company. To turn self-employment into a business, you have to take one step backward financially to get two steps ahead. This is what I call the valley of self-employment — a time when your profitability actually goes down when you make the transition to a business. » more

How to Become a Talent Magnet

~ published January 19, 2011 Inc.com

After just five hours of meetings, a venture capitalist writes a check to fund an entrepreneur. When asked why he was confident despite so little diligence, the VC responds, “We just clicked.”

A case could be made that the more people you have in support of your venture, the better its odds of success are. So how do you go about attracting people—venture capitalists, an angel investor, a mentor, coach, partner or manager to help you with key decisions—to your company?  » more